EEOC Issues Final Rules Governing Employee Wellness Programs and Antidiscrimination Laws
May 17, 2016
On May 17, 2016, the Equal Employment Opportunity Commission (EEOC) issued two final rules (available here) that establish the extent to which employers may offer incentives to encourage employees and their spouses to participate in corporate wellness programs. The rules offer guidance on the degree to which employers may, consistent with Title I of the Americans with Disabilities Act (ADA) and Title II of the Genetic Information Nondiscrimination Act (GINA), inquire about health and disabilities or conduct medical examinations as a pre-condition to receiving incentives for wellness programs. The new regulations allow employer-sponsored wellness programs to move forward, provided that employers follow EEOC’s roadmap designed to safeguard against discrimination.
While the final rules track the proposed rules in many respects, they contain a few significant changes that will limit the incentives employers may offer employees and their spouses to participate in wellness programs. The final rules will go into effect on January 1, 2017.
The EEOC’s final rules are intended to harmonize the Health Insurance Portability and Accountability Act (HIPAA), the Patient Protection and Affordable Care Act (ACA) and the joint regulations issued by the Departments of Labor, Health and Human Services, and Treasury (the “Tricare regulations”). Although the ACA permits employers to offer financial incentives to encourage participation in wellness programs, there has been a tension between the incentives allowable under the ACA and Tricare regulations and those permitted under the ADA, which precludes employers from making medical inquiries or conducting medical examinations on employees unless they are part of a “voluntary” health program. There has also been tension with GINA, which limits employers’ ability to ask questions about an employee’s family medical history. In order to address these inconsistencies, the EEOC proposed rules in April 2015 to carve out a narrow exception to the ADA in order to allow employers to gather this information as part of a wellness program. In October 2015, the EEOC proposed rules addressing the extent to which employers may properly offer incentives to an employee’s spouse to participate in a wellness program.
The most important changes from the proposed rules and the most significant changes from the ACA and Tricare regulations are:
- Limits on Financial Incentives EEOC declined to revise financial incentive limits to make them consistent with those established in the Tricare regulations. In addition, employers will no longer be able to offer the same level of financial incentives to employees with family coverage as currently permitted under the ACA.
- ADA Employers may only offer financial incentives of up to 30% of the total cost of self-only coverage premiums. This is contrary to the ACA, which permits employers to offer financial incentives of up to 30% of the plan premium in which the employee and any family members are enrolled.
- GINA Spousal incentive are limited to up to 30% of the total cost of ?self-only? coverage under the group plan.
- Tobacco Cessation Employers may not offer enhanced incentives for programs aimed at curbing tobacco use if the program tests for the presence of nicotine. Under the Tricare regulations, employers may offer incentives of up to 50% of the cost of coverage for smoking cessation.
- New Rule Applies More Broadly The proposed rules only applied certain provisions, such as limits on financial inducements to wellness programs that were that were part of a group plan. The EEOC revised the proposed rule so that the entire rule now applies any employer-sponsored wellness program that offers incentives and asks disability-related questions or requires medical examinations, including a program offered outside a group health plan or a program offered by an employer who does not provide group health insurance.
- Notice/Confidentiality The proposed notice and confidentiality provisions will apply to wellness programs regardless of whether they are offered as part of a group health plan or offered as a benefit by employers that do not offer group health insurance to their employees.
- ADA Employers must provide participating employees with a notice that explains what information will be collected as part of a wellness program, with whom the information will be shared and for what purpose, limits on disclosure, and how personal health information will be kept confidential.
- GINA The new rule includes statutory notice and consent provisions for health and genetic services provided to employees and their family members.
- Reasonably Designed Standard As in the proposed rule, employee health programs must be reasonably designed to promote health and prevent disease. Employers protested that the requirement, which gives the EEOC the opportunity to determine the worthiness of an employer wellness program, is not only duplicative of the ACAs existing requirements, but goes well beyond the civil rights agency's area of expertise and statutory authority.
- ADA Safe Harbor Despite two court decisions to the contrary, the EEOC reaffirmed its position that the ADA safe harbor would not apply to wellness programs that are part of a group health plan.
There are a few silver linings for employers:
- No Affordability Standard - Although the EEOC did not include an ?affordability standard? in the proposed rule, the Commission requested public input on whether one would help the agency determine whether a wellness program is voluntary under the ADA.
- No Prior Written Authorization - The agency declined to include a requirement in the final rule that employees provide prior written and knowing authorization. Employers argued that such authorization was unnecessary and would only increase administrative and compliance costs.
With the new rules in place, employers should review their wellness plans to determine if they fall within the limited permissible exceptions to the ADA and GINA. While the intent of rules is to offer clarity, they can also blur some lines on a plan-by-plan basis-as often happens in the regulatory space. Employers need to remain vigilant that their plans are compliant.
If you have any questions, please contact Leslie Silverman, or your FortneyScott attorney with whom you work.
There have been significant changes at the Equal Employment Opportunity Commission (EEOC) during President Trump’s first four weeks in office, as part of the widespread changes at federal agencies. To learn the latest EEOC developments, join FortneyScott’s next webinar on February 25, from 12 noon to 1:00pm (Eastern) as the latest in FortneyScott’s ongoing series of webinar s and podcasts that provide employers with the latest information on the key Trump Administration changes. Register here . In this webinar , FortneyScott’s highly experienced attorneys, including David Fortney, Leslie Silverman (former Vice Chair of EEOC), and Nita Beecher, will discuss the practical implications for employers due to the latest changes at EEOC, including: Impact of President Trump’s unprecedented personnel actions resulting in a lack of a quorum; Response of Acting Chair Andrea Lucas to President Trump’s Executive Orders; Likely focus of the EEOC under the Trump Administration; and, Impact on EEOC of the Trump Administration’s efforts to secure reversal of the Supreme Court’s seminal Humphrey’s Estate decision. Click here to register for this important and timely free webinar on Tuesday, February 25, 2025, from 12 noon to 1:00pm (Eastern).
There have been significant changes at the Equal Employment Opportunity Commission (EEOC) during President Trump’s first four weeks in office, as part of the widespread changes at federal agencies. To learn the latest EEOC developments, join FortneyScott’s next webinar on February 25, from 12 noon to 1:00pm (Eastern) as the latest in FortneyScott’s ongoing series of webinar s and podcasts that provide employers with the latest information on the key Trump Administration changes. Register here . In this webinar , FortneyScott’s highly experienced attorneys, including David Fortney, Leslie Silverman (former Vice Chair of EEOC), and Nita Beecher, will discuss the practical implications for employers due to the latest changes at EEOC, including: Impact of President Trump’s unprecedented personnel actions resulting in a lack of a quorum; Response of Acting Chair Andrea Lucas to President Trump’s Executive Orders; Likely focus of the EEOC under the Trump Administration; and, Impact on EEOC of the Trump Administration’s efforts to secure reversal of the Supreme Court’s seminal Humphrey’s Estate decision. Click here to register for this important and timely free webinar on Tuesday, February 25, 2025, from 12 noon to 1:00pm (Eastern).
The False Claims Act and "Illegal DEI": What Federal Contractors Need to Know. Join Nita Beecher, Sarah Mugmon, and Adriana Joens to discuss the following questions.
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Join David Fortney, Elizabeth Bradley, and Nita Beecher as they discuss the practical implications of how employers respond to the new prohibitions on “illegal DEI,” including:
There have been significant changes at the Equal Employment Opportunity Commission (EEOC) during President Trump’s first four weeks in office, as part of the widespread changes at federal agencies. To learn the latest EEOC developments, join FortneyScott’s next webinar on February 25, from 12 noon to 1:00pm (Eastern) as the latest in FortneyScott’s ongoing series of webinar s and podcasts that provide employers with the latest information on the key Trump Administration changes. Register here . In this webinar , FortneyScott’s highly experienced attorneys, including David Fortney, Leslie Silverman (former Vice Chair of EEOC), and Nita Beecher, will discuss the practical implications for employers due to the latest changes at EEOC, including: Impact of President Trump’s unprecedented personnel actions resulting in a lack of a quorum; Response of Acting Chair Andrea Lucas to President Trump’s Executive Orders; Likely focus of the EEOC under the Trump Administration; and, Impact on EEOC of the Trump Administration’s efforts to secure reversal of the Supreme Court’s seminal Humphrey’s Estate decision. Click here to register for this important and timely free webinar on Tuesday, February 25, 2025, from 12 noon to 1:00pm (Eastern).
There have been significant changes at the Equal Employment Opportunity Commission (EEOC) during President Trump’s first four weeks in office, as part of the widespread changes at federal agencies. To learn the latest EEOC developments, join FortneyScott’s next webinar on February 25, from 12 noon to 1:00pm (Eastern) as the latest in FortneyScott’s ongoing series of webinar s and podcasts that provide employers with the latest information on the key Trump Administration changes. Register here . In this webinar , FortneyScott’s highly experienced attorneys, including David Fortney, Leslie Silverman (former Vice Chair of EEOC), and Nita Beecher, will discuss the practical implications for employers due to the latest changes at EEOC, including: Impact of President Trump’s unprecedented personnel actions resulting in a lack of a quorum; Response of Acting Chair Andrea Lucas to President Trump’s Executive Orders; Likely focus of the EEOC under the Trump Administration; and, Impact on EEOC of the Trump Administration’s efforts to secure reversal of the Supreme Court’s seminal Humphrey’s Estate decision. Click here to register for this important and timely free webinar on Tuesday, February 25, 2025, from 12 noon to 1:00pm (Eastern).
The False Claims Act and "Illegal DEI": What Federal Contractors Need to Know. Join Nita Beecher, Sarah Mugmon, and Adriana Joens to discuss the following questions.
On February 5, 2025, six Plaintiffs (the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO); The American Federation of Government Employees (AFGE); The American Federation of State, County & Municipal Employees, AFL-CIO (AFSCME); Service Employees International Union, AFL-CIO (SEIU); The Communications Workers of America, AFL-CIO (CWA); and Economic Policy Institute (EPI) filed a complaint in the U.S. District Court for the District of Columbia against the Department of Labor (DOL), Labor’s Acting Secretary Vince Micone, the U.S. DOGE Service (USDS), and the U.S. DOGE Service Temporary Organization. The complaint seeks declaratory and injunctive relief to prevent the “Department of Government Efficiency” (DOGE) from accessing DOL’s information systems and the sensitive data therein concerning both federal employees and private citizens. The complaint explains how DOGE, sanctioned only by Executive Order 14158 (Establishing the President’s Department of Government Efficiency), functions as a network of DOGE-related offices, teams, and roles overseen by Elon Musk within the Executive Office of the President and implanted within each federal agency. The complaint describes DOGE’s pattern as overtaking federal agencies without statutory authority, seizing their information systems, threatening career civil servants’ resistance with adverse employment action, and unilaterally dismantling or restructuring the agencies. As DOL is DOGE’s next posited target, plaintiffs seek to prevent DOGE from unlawfully accessing DOL’s sensitive information systems, including such systems maintained and managed by the Federal Employees’ Compensation Act Claims Administration, the Wage and Hour Division, the Occupational Safety and Health Administration, and the Bureau of Labor Statistics. These systems include medical information, financial information, and personnel information, as well as the identities of anonymous whistleblowers. Plaintiffs allege that DOGE’s actions are unconstitutional because DOGE lacks lawful authority to either direct agency actions or access statutorily restricted government systems. Rather, DOGE’s function is limited to advising and assisting the President. Plaintiff’s claims mostly arise under the Administrative Procedure Act, which protects individuals harmed by “arbitrary and capricious” final agency actions and provides court intervention when such harm occurs. Specifically, Plaintiffs accuse DOL of unlawfully threatening federal employees with termination, violating information privacy statutes by instructing and disclosing confidential and private records, creating new rules without meeting “notice and comment” requirements, and abusing its discretion. As relief, Plaintiffs asked the Court to declare DOGE’s access to DOL’s systems as unlawful. Plaintiffs also request a Court order forbidding DOL from granting DOGE access to DOL’s systems, taking adverse personnel action against employees who refuse providing DOGE with unlawful access, and providing non-public DOL information to any person with a conflict of interest. This is the first complaint filed challenging DOGE’s access to sensitive government information systems.
On February 3, 2025, four plaintiffs (the National Association of Diverse Officers in Higher Education, the American Association of University Professors, the Restaurant Opportunities Centers United, and the Mayor and City Council of Baltimore, Maryland) jointly filed a complaint challenging EO 14151 (“Ending Radical Government DEI Programs and Preferencing”) and EO 14173 (“Ending Illegal Discrimination and Restoring Merit-Based Opportunity”). The complaint does not challenge the revocation of 11246 yet addresses the legality of §§3-4 of EO 14173. The complaint alleges that EO 14173 is unconstitutional on various grounds and seeks a court order overturning the EO. With respect to EO 14173, the complaint alleges that §3 violates the Free Speech Clause of the First Amendment. By threatening FCA enforcement against federal contractors and grantees who certify that they do not operate undefined “programs promoting DEI,” plaintiffs allege that §3 chills the expression of or participation in diversity, equity, inclusion, and accessibility initiatives. Plaintiffs also alleges that §3 violates separation of powers because it empowers the executive branch, rather than Congress, to control federal funding based on whether contractors or grantees operate “programs promoting DEI.” As for §4 of EO 14173, the complaint alleges that it likewise violates the First Amendment’s Free Speech Clause by threatening civil investigation and “deterrence” against anyone who expresses support for undefined “illegal DEI.” Furthermore, because §4 is vague with respect to terms (e.g., “illegal DEIA and DEIA policies”) and the criteria for selecting which organizations are subject to investigation or enforcement actions, plaintiffs also allege §4 violates the Fifth Amendment’s Due Process Clause. We anticipate additional plaintiffs filing similar lawsuits related to EO 14173 are forthcoming.
Join David Fortney, Elizabeth Bradley, and Nita Beecher as they discuss the practical implications of how employers respond to the new prohibitions on “illegal DEI,” including:
Yesterday, Fortney & Scott launched the first in a series of webinars to provide employers with valuable information about President Trump’s actions that significantly impact the workplace.
FortneyScott presents one of a series of webinars regarding Trump's Executives Orders, specifically, the revocation of EO 11246.
In an anticipated move, the Department of Labor halted enforcement of anti-discrimination laws and affirmative action programs (AAPs) for federal contractors, following an Order from the Acting Secretary of Labor, Vincent Micone.
Former President Donald Trump has revoked a nearly 60-year-old executive order, originally signed by President Lyndon Johnson, that prohibited government contractors.
